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Tilray, U.S. brand group partner on cannabis-infused retail products

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Armina Ligaya, The Canadian Press


Published Tuesday, January 15, 2019 6:16AM EST


Last Updated Tuesday, January 15, 2019 6:27AM EST

Licensed producer Tilray Inc. has teamed up with the U.S. company behind brands such as Juicy Couture, Aeropostale and Nine West to develop and sell co-branded consumer cannabis products globally, with items expected to hit U.S. and Canadian shelves within the next year.

The Nanaimo, B.C.-based company announced Tuesday the long-term revenue sharing agreement with Authentic Brands Group, to whom Tilray will initially pay US$100 million in cash and stock, or up to $250 million depending on certain milestones.

Tilray will receive up to 49 per cent of the net revenue from these products bearing names from ABG’s portfolio of more than 50 brands, with a guaranteed minimum payment of up to US$10 million annually for 10 years.

“We believe that consumers will be much more likely to try a cannabis or CBD product if it’s branded with a brand that they already know and trust,” said Tilray’s chief executive Brendan Kennedy.

Under the deal, Tilray would be the preferred supplier of active cannabinoid ingredients, such as CBD and THC, for ABG’s cannabis products.

“We see extraordinary potential for cannabis in the fast-growing health and wellness category — particularly for CBD products in the United States and around the world — and are excited about this long-term partnership,” said ABG’s executive vice chairman Daniel Dienst in a statement.

While the two companies have not finalized which brands will be utilized, potential products include Nine West CBD foot cream or CBD-infused muscle wraps under the tennis brand Prince, with a logo that says “powered by Tilray.”

The deal with ABG does not limit Tilray from signing partnerships with companies in the cosmetic space, said Kennedy.

He expects these co-branded products to be on the market within 12 months on both sides of the border, as allowed under U.S. and Canadian regulations.

The signing of the farm bill in the U.S. in December designated hemp as an agricultural crop and opened the door for widespread distribution of hemp-derived CBD products south of the border.

As such, their co-branded products south of the border will contain hemp-derived CBD, sourced from a farm in the U.S., said Kennedy.

In Canada, these consumer goods will include THC and CBD products sourced domestically, but how they will be distributed will depend on domestic regulations concerning edibles and topical products, he added.

“Imagine a CBD foot cream sample that was in every box of the one million pairs of shoes that they sell every year… and that introduces that consumer to this particular product,” he said.

While dried flower and cannabis oils have been legal in Canada since Oct. 17, Ottawa only released proposed rules for edibles and topicals in December. The federal government is gathering public input on these draft rules until Feb. 20, and edibles will be legalized for sale no later than Oct. 17, 2019.

This is the latest partnership for Tilray, which last month announced a deal with the parent company of Labatt Breweries of Canada, Anheuser-Busch InBev, to research cannabis-infused drinks for the Canadian market.

The licensed producer last month signed a collaboration agreement with Sandoz AG, part of the Novartis pharmaceutical group, to work together to increase the availability of high quality medical products across the world.

While big tobacco and big alcohol have taken equity stakes in some of their competitors, such as alcohol giant Constellation Brands and Canopy Growth Corp., Tilray has opted to go the partnership route, Kennedy said.

“We preferred to control our own destiny… It’s early days and we’re not for sale.”

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Federal Budget 2021: Ottawa adds $1B to broadband fund for rural, remote communities

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The federal government will add $1 billion to a fund for improving high-speed communications in rural and remote areas of Canada, bringing the total to $2.75 billion by 2026, the Liberals said Monday in their first full budget since the pandemic began last year.

The money is going to the Universal Broadband Fund, which is designed to support the installation of “backbone” infrastructure that connects underserved communities to high-speed internet.

It’s one of many government and private-sector initiatives that have gained urgency since the pandemic began, as Canadians became more dependent on internet service for applications ranging from e-learning to daily business operations.

Ottawa says the additional money will keep it on track to have high-speed broadband in 98 per cent of the country by 2026, and 100 per cent by 2030.

Money spent on high-speed communications will be good for a recovering economy, said Pedro Antunes, chief economist at the Conference Board of Canada, a non-partisan think-tank.

The latest data from Statistics Canada says there were about five million people working from home during the pandemic, up from about two million prior to that, Antunes said in an interview.

“That’s a quarter or so of the workforce,” he added. “And I think a fair number of those people are going to continue to work from home, at least in some part-time way.”

Improved connections to high-speed broadband and mobile communications will add to the productive capacity of the economy overall, especially as it reaches beyond Canada’s cities, Antunes said.

He said there’s been a “real issue” with economic growth outside major urban centres and the improved connectivity “is something that can help stimulate that.”

The Universal Broadband Fund was initially mentioned in the 2019 budget, though specifics were not available until last November’s fiscal update.

The $1-billion top-up to the broadband fund announced today is in addition to $1.75 billion promised to the fund by the federal government’s November fiscal update.

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COVID-19: What you need to know for April 19

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Provincewide

  • Per today’s government report, there are 4,447 new cases in Ontario, for a total of 421,442 since the pandemic began; 2,202 people are in hospital, 755 of them in intensive care, and 516 on ventilators. To date, 7,735 people have died.
  • According to data from the Ministry of Health and Long-Term Care, there are 40 outbreaks in long-term-care facilities, 36 confirmed active cases of positive residents, and 127 confirmed active cases of positive staff. To date, there have been 3,755 confirmed resident deaths and 11 confirmed staff deaths.
  • Per the government’s report on Ontario’s vaccination program, as of 7 p.m. yesterday, Ontario has administered 66,897 new doses of COVID-19 vaccines, for a total of 3,904,778 since December 2020. 3,212,768 people have received only one dose, and 346,005 people have received both doses.

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Federal budget 2021 highlights: Child care, recovery benefits, OAS increases – everything you need to know

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The federal government’s first budget in more than two years certainly looks the part: At 739 pages, it is a hefty document chock full of billions in new spending.

Those funds will be spread among a number of key groups – students, seniors, parents and small-business owners, to name a few – as Ottawa looks to bolster Canada’s recovery from COVID-19 but also plan for life beyond the pandemic.

To that end, the deficit is projected to hit $354.2-billion in the 2020-21 fiscal year, which just ended – better than expected about five months ago, given the economy’s resilience over the winter months. It is estimated to fall to $154.7-billion this fiscal year, before dropping further in the years to come as pandemic spending recedes from view.

Here are some of the highlights from Monday’s budget.

The budget outlines tens of billions of dollars in federal subsidies for a national child-care program, a promise the Liberal Party has made in some form since the early 1990s. Child-care supports became a point of national debate during pandemic lockdowns as parents with young children struggled to juggle work and family responsibilities.

In total, the government proposes spending as much as $30-billion over the next five years, and $8.3-billion each year after that, to bring child-care fees down to a $10-a-day average by 2026. The proposal, which requires negotiation with the provinces and territories, would split subsidies evenly with those governments and targets a 50-per-cent reduction in average child-care fees by the end of 2022.

The federal program is largely modelled on Quebec’s subsidized child-care system, implemented in the 1990s in an effort to increase women’s access to the labour market. Since then, labour participation rates for women aged 25 to 54 in the province have grown to exceed the national average by four percentage points.

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